The U.S.–Israeli war with Iran has exposed a long-standing structural vulnerability: Asia’s extraordinary and enduring dependence on hydrocarbons from the Gulf. What distinguishes this crisis is the breadth of exposure. Beyond crude oil, disruptions now extend to liquefied natural gas (LNG), fertilizers, refined oil products, aluminium, and even helium, a consequence of the Gulf states’ economic diversification. The war has not merely shocked supply chains; it has exposed the systemic fragility at their core.
The Scope of Asian Exposure
Vessel tracking data indicate that 16 million barrels per day of crude oil and oil products have stopped flowing through the Strait of Hormuz, a staggering decline of 80 percent compared to the 2025 average. This decline reflects a sharp collapse in maritime traffic, with only 10 vessel crossings recorded over a four-day period in contrast to a typical daily average of 70–80. The first-order effects on Gulf economies are already visible. In addition to hydrocarbon production and exports, disruptions are being felt in industrial sectors such as aluminium, petrochemicals, and steel, as well as in tourism, banking, and logistics. JPMorgan estimates a 0.6 percent decline in the combined GDP of the six Gulf states for 2026, following five years of sustained growth, with Oman and Saudi Arabia being the least affected.
The second-order effects fall on consumers of Gulf crude and products. In this regard, Asia is not merely exposed to disruptions in the Strait of Hormuz; it is acutely vulnerable. Around 80 percent of crude oil and oil products shipped through the Strait of Hormuz are destined for Asia, as is nearly 90 percent of LNG. The Gulf is also a major producer and exporter of fertilizers, accounting for nearly half of global urea-based fertilizer exports. A significant share of Gulf-produced urea exported via the Strait, roughly 35 percent, is destined for Asia, compared to just 11 percent sent to Europe. For much of Asia, the conflict is not a distant geopolitical event but an immediate price and volume shock that risks cascading into fuel shortages, power blackouts, and agriculture strain as planting seasons are impacted.
Asia’s vulnerabilities, however, are not evenly distributed. Among major importers, Japan, South Korea, and Taiwan face the sharpest and most direct exposure to disruptions in the Strait of Hormuz. Between 60 and 75 percent of the crude oil these countries import transits the Strait, compared with 38 percent for China and 42 percent for India, although New Delhi receives significant crude imports from Russia.
The disparity across Asia is also underlined by the fact that countries in East Asia have relatively large government and commercial petroleum reserves and are more resilient to supply disruptions from the Gulf (Chart 1). These reserves provide a buffer that most of Southeast Asia cannot match, with the conflict already triggering emergency demand management including fuel rationing, mandatory remote work for public and some private sector employees, even-odd vehicle days, and raised air-conditioning temperatures in government buildings.
Chart 1: National strategic reserves and commercial inventories held in key Asian markets (source: S&P Global)
The opportunity for fuel-switching is another dimension that differentiates resilience in Asia. India and Indonesia can partially mitigate LNG shortfalls from Qatar through cheap and indigenous coal for power generation. By contrast, gas dominates the domestic energy mix in Bangladesh, Pakistan, and Singapore, where Qatar accounts for roughly 40, 60, and 90 percent of total LNG imports, respectively, as they have no indigenous gas or coal to rely on. All three are now bidding against each other as well as better-resourced European buyers for expensive spot LNG cargos, which Qatar declared force majeure on following attacks on the Ras Laffan gas and industrial complex.
Helium and the Commodity Cascade
The headline disruptions to oil and gas overshadow a cascade of secondary commodity shocks that may prove equally consequential for Asia’s economic trajectory. While food and aluminium supply chain issues have widely been discussed, helium presents a critical and underacknowledged risk. Helium is extracted as a byproduct of LNG processing. Qatar is the largest exporter and second-largest producer of helium behind the United States, accounting for one-third of global helium supply. The halt to Qatar’s LNG production has significantly reduced helium output and driven up spot prices. Unlike oil and natural gas, helium is much more difficult to store, whether as a liquid or gas, making stockpiling more challenging. For Asia, the helium disruption goes beyond everyday use, threatening the continent’s technological ambitions across a variety of sectors.
South Korea imported 64.7 percent of its helium from Qatar in 2025. Seoul’s semiconductor manufacturers use helium to cool silicon wafers during fabrication, as well as to create stable vacuum environments in lithography, a process that uses light to print intricate, nanometer-scale circuit patterns onto silicon wafers. Domestic chip makers like SK Hynix and Samsung have a six-month supply of helium and are increasing recycling efforts to reduce demand for fresh gas. In Taiwan, TSMC has attempted to diversify from Qatari supplies, increasing helium imports from Russia to over 9 percent, up from 3 percent in 2021. Even so, both South Korea and Taiwan account for 18 percent each of global semiconductor production capacity, underscoring the systemic risk of a prolonged helium shortage.
The stakes extend well beyond chip fabrication. Helium’s low boiling point makes it irreplaceable for maintaining superconducting magnets in MRI systems. Asia hosts the fastest-growing installed base of MRI units, heavily concentrated in Japan, South Korea, China, and increasingly Southeast Asia, driven by rising healthcare expenditures, aging populations, and private hospital networks. This growth now faces an emerging supply constraint.
In the space sector, helium is essential for rocket pressurization systems and cryogenic fuel handling. Ambitious space programs in India, China, and South Korea all depend on reliable helium supply.
Alternative sources of helium do exist. The United States is the world’s largest producer, and Canada is expanding capacity. However, ramping up extraction and refinery capacity takes years, not weeks. For Asia’s technology industries in the immediate term, there is no easy substitute.
The Gulf’s Role
The current disruption is not a turning point for Asia’s energy dependence on the Gulf; the Strait of Hormuz is a well-known structural chokepoint susceptible to recurring crises. Asian governments will call for diversification, as they have after every previous shock. But the Gulf states are not passive actors. Their long and structurally embedded relationships with Asian energy markets give them leverage and options, provided they are deployed strategically rather than reactively. This is the moment to not only restore the status quo but also to deploy sustained political will and capital to deepen, diversify, and institutionalize the relationships that have long underpinned Gulf prosperity.
The most immediate measure is the expansion of overseas commercial storage. Gulf national oil companies (NOCs) already operate joint strategic stockpiles and joint refinery arrangements in East Asia and India, with contractual mandates that tie those facilities to Gulf feedstocks. The model works: Japan and South Korea will be releasing oil from the joint stockpile to moderate prices that have risen above $100 per barrel due to disruptions in Hormuz. The gap lies in Southeast and South Asia, where commercial storage infrastructure is thin or absent. Only one Gulf NOC operates commercial storage in a fast-growing Asian market: Kuwait Petroleum Corporation’s stake in a Vietnamese refinery. Pakistan emerges as the most commercially and strategically compelling candidate for Gulf expansion with robust port infrastructure, a large domestic market, strong government ties, and limited domestic refining capacity.
In LNG markets, Gulf producers can leverage the current crisis to accelerate long-term supply agreements with Asian buyers now acutely aware of their vulnerability to spot market volatility. The force majeure at Ras Laffan has concentrated attention in ways that years of diplomatic engagement could not. Asian buyers, particularly in Vietnam, Bangladesh, Pakistan, and the Philippines, now have urgent political incentives to lock in diversified, long-term LNG supply arrangements. Gulf producers with stakes in LNG plants outside the Strait of Hormuz—including QatarEnergy’s Golden Pass and Abu Dhabi-based ADNOC’s RioGrande in the United States, and Coral South in Mozambique—should move quickly to convert that urgency into durable commercial relationships. Stockpiling LNG or helium, however, is far less feasible than oil, given the technological constraints of storage and perishability.
Gulf states should resist the temptation to use production curtailments as geopolitical leverage. There are suggestions that a production embargo by Gulf states could globalize pain and accelerate a resolution to the Hormuz crisis or the ongoing war. The logic is self-defeating. The Gulf’s most durable strategic asset in Asia is its hard-earned reputation as a reliable supplier. A deliberate production stoppage, distinct from force majeure, would irreparably damage that reputation and hand long-term market share to other established and emerging suppliers. The golden goose must be strengthened, not sacrificed.